This paper comprehensively assesses the People Liberation Army – Navy (PLAN)’s role and activities, as well as its behaviour in the South China Sea under China’s grand strategy of Peaceful Rising, in which the One Belt One Road (OBOR) initiative and the String of Pearls (SoP) strategy are key components. The PLAN’s behaviour in the South, East China Sea, the Indian Ocean, and its rapid naval modernization can only be conceived and understood in the context of the OBOR. The nature of China’s grand strategy is also analyzed by revealing how China adopted, applied and embedded Captain Mahan’s naval theory as the theorical base for the maritime component of Chinese Grand Strategy. This analysis provides basis to understand future Chinese activities, as well as its rivals, in particular the ASEAN, the U.S.A, Japan and India might react.